KARIYA, Japan — Kiyotaka Ise, the new president of Aisin Seiki Co., says his top priority for the mammoth Toyota-affiliated auto parts maker is "scrap and build."
Not in the traditional sense of tearing down old factories and opening new ones.
But in a new sense of scrapping old products that are fading away, such as manual transmissions, and developing new ones such as gearboxes with integrated electric motors.
The veteran Toyota Motor Corp. engineer, who led the Lexus luxury brand as well as advanced r&d at Japan's biggest automaker, took the helm in June to jump-start Aisin Seiki's bumpy transition into the new age of software-laden, electrified mobility.
He was picked for the job partly because he shares the sense of crisis fomented by his former boss, Toyota Motor President Akio Toyoda. Toyota owns 24.8 percent of the transmission and brake maker and has been reorganizing group suppliers, including Aisin Seiki and Denso Corp., to tackle new fields such as connectivity, autonomous driving and electrification.
"I don't see such a sense of crisis among the company's employees," Ise said in an interview at Aisin Seiki's global headquarters near Nagoya. "We all need a sense of crisis."
Ise warned that Aisin Seiki is still playing catch-up with rivals on the global stage.
"I believe that we have a significant gap in earning capability," Ise said.
The stakes are especially high for Aisin Seiki. For years, it banked on supplying Toyota such mainstay automotive hardware as transmissions, brakes and powertrain components. Last year, it even posted record profit and revenue.
But Aisin Seiki knows times are changing.
Uncertainty looms partly because of Toyota's plans to phase out traditional internal combustion engines through 2050 as part of a push to slash emissions. Ise cited Eastman Kodak Co. as a cautionary tale. Once the world's largest photographic film maker, Kodak was forced into bankruptcy in 2012 because it did not adapt quickly enough to the advent of digital cameras.
Aisin Seiki likewise needs structural reform "in order to survive," Ise said. "We must start during the good times because structural reform is something that requires time."
Electrification poses the single biggest threat, Ise said. That is why he plans a shake-up.